Top U.S. CEOs downgrade growth and hiring forecasts as the economy ‘continues to lack momentum’

Reporting from Washington —  The nation’s top chief executives have downgraded their expectations for hiring and overall economic growth, complaining in survey results released Tuesday that the U.S. economy “continues to lack momentum.”

Despite those forecasts, the quarterly survey from the Business Roundtable, a trade association of CEOs of the largest U.S. corporations, showed a modest increase in its overall index compared with the fourth quarter of last year.

Improved expectations for sales and capital spending in the coming months pushed the group’s CEO Economic Outlook Index to 69.4 this quarter, from 67.5, which was a three-year low.

The long-term average is about 80 within its range of 150 to negative 50. It dropped to negative 0.5 at its low during the Great Recession and has reached as high as 113 during the recovery.

The survey’s mixed results show that “the economy continues to lack momentum,” said Doug Oberhelman, the CEO of Caterpillar Inc. and the group’s chairman.

“We need stronger, more robust economic growth and better prospects for high-quality employment,” he said.

Oberhelman said one way to boost growth would be for Congress to ratify the Trans-Pacific Partnership trade deal, which has come under fire from the front-runners for the Democratic and Republican presidential nominations.

A majority of respondents in the survey said that the agreement would have a positive effect on their ability to become more competitive globally and expand their U.S. operations.

The CEOs forecast that the U.S. economy would expand 2.2% this year, down from a 2.4% forecast in December.

Hiring expectations fell off sharply. Just 29% of CEOs said they planned to expand their payrolls in the next six months, down from 35% in the fourth-quarter survey. And 38% of respondents in the latest survey said they expected layoffs during that period, up from 34%.

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